Real­tors want open bid­ding

The Standard (St. Catharines) - - Business - LINDA NGUYEN

TORONTO — The On­tario Real Es­tate As­so­ci­a­tion is mak­ing more than three dozen rec­om­men­da­tions to the pro­vin­cial gov­ern­ment on how it should up­date the rules gov­ern­ing real­tors, in­clud­ing al­low­ing for a more open bid­ding process for buy­ers and sell­ers.

The group says the Real Es­tate and Busi­ness Bro­kers Act (REBBA), which was put in place in 2002, is in need of a re­vamp.

“The av­er­age price of a home in 2002 was $275,000 in Toronto and most deals were closed by a fax ma­chine,” said Tim Hu­dak, chief ex­ec­u­tive of OREA, which has more than 70,000 mem­bers.

“This leg­is­la­tion is out of date.” One of the sug­ges­tions in­cludes per­mit­ting real­tors to dis­close de­tails about a com­pet­ing of­fer to an­other bid­der, if all sides in­volved agree.

The group says al­low­ing this would re­sult in a more “trans­par­ent” multi-of­fer process that would give buy­ers more in­for­ma­tion to make their best of­fer, and sell­ers the knowl­edge that they have re­ceived the best of­fer for a prop­erty.

Cur­rently, most buy­ers and sell­ers par­tic­i­pate in a blind bid­ding process where buy­ers go in with an of­fer, in the hopes that they are not out­bid.

If they are, they are then asked to raise their bid, but with­out know­ing the de­tails about the al­ter­nate of­fer.

“Whether con­sumers de­cide to con­sent to a trans­par­ent mul­ti­ple of­fer process or not, they should have the choice un­der REBBA,” ac­cord­ing to the 33-page re­port.

The re­port fol­lows a year-long re­view of the leg­is­la­tion by a task force made up of the heads of the coun­try’s top real es­tate bro­ker­ages in­clud­ing Sotheby’s In­ter­na­tional Realty Canada, Royal LePage Canada and Re/ Max In­te­gra.

The re­port also sug­gests tougher rules be in­tro­duced against those who op­er­ate as real es­tate “con­sul­tants,” in an ef­fort to avoid be­ing re­quired to reg­is­ter and train as real­tors.

Hu­dak says his group has seen a growth in the num­ber of peo­ple who act or pass off as real­tors, but do not op­er­ate un­der the same le­gal and eth­i­cal rules.

Among the 37 rec­om­men­da­tions, the re­port sug­gests:

• Rev­ert­ing the to­tal num­ber of hours re­quired to com­plete a re­al­tor li­cence to 255 hours, from the newly de­creased 120 hours (set to come into ef­fect in 2019).

• Re­quir­ing builders and de­vel­op­ers to reg­is­ter un­der the act to sell pre-con­struc­tion prop­er­ties.

• Dou­bling the max­i­mum fines for those who break the REBBA code of ethics to $50,000 for sales­peo­ple and bro­kers and $100,000 for bro­ker­ages.

• Al­low­ing real­tors to in­cor­po­rate their busi­nesses, which is per­mit­ted in B.C., Que­bec, Al­berta, Saskatchewan, Man­i­toba and Nova Sco­tia.

SEAN KIL­PATRICK THE CANA­DIAN PRESS

The On­tario Real Es­tate As­so­ci­a­tion is mak­ing more than three dozen rec­om­men­da­tions to up­date the rules gov­ern­ing real­tors.

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